World Gaming On The Ropes
Published: Monday, October 09, 2006 Online-Casinos.com
WORLD GAMING ON THE ROPES
Veteran turnkey provider requests that its shares be suspended
One of the pioneering turnkey providers in the online gambling industry, World Gaming plc has asked for its shares on the London market to be suspended following an almost 90 percent decline in the value of its stock as a result of investor panic over the new US financial restrictions.
Like other offshore gambling firms, World Gaming relies heavily on revenue from US customers, which in World Gaming's case is believed to represent 95 percent of its business via the sites sportingbet.com, sportsbetting.com and betonusa.com.
In a statement, the company said there was “a fundamental uncertainty" over its ability to continue trading.
The statement announced: “Following the announcement released by the company on Tuesday 3 October relating to developments in United States online gambling legislation, the Directors of World Gaming announce that, following discussions with all of key parties concerned and having taken legal advice, they have requested the trading of the Company's shares be suspended with immediate effect due to a fundamental uncertainty over its ability to continue trading.”
Earlier this month, World Gaming said it "may be in technical default of its loan conditions due to a material adverse change in the circumstances of the business, arising from proposed changes in legislation in the United States". The company warned last week that it could be in "technical default of its loan conditions", after seeing its debt level soar to $23 million (GBP12.7 million).
A merger with larger Internet gambling group Sportingbet was also scrapped after the approval of the new laws, which ban banks and credit card companies from processing internet bet payments.
The company said it would make further announcements in due course.
